25 March 2011

Some while ago, I mentioned that AToM had re-launched its ‘Complex Prime’ proposition. Complex Prime looks at mortgage applications which, for whatever reason, do not fit the normal high street credit scoring/tick box mentality or need something of a more complex underwriting nature.

A recent example we came across was a young chap at the age of 76. Obviously well into retirement and enjoying a pension of around £75k per annum. Very nice! He wanted to move properties and needed a loan of around £150k to purchase a property valued at £700k. Because of his age many lenders had turned him away. And because he, according to many lenders, had no ‘earned’ income, found most doors shut. However, we were able to offer a mortgage over a 10 year term on a Capital Repayment basis, on the understanding that his wife would receive 60% of his pension income, should the unfortunate happen to the husband. The rates were competitive and fees attractive.

Another example was a gentleman looking to re-mortgage a holiday home that was only allowed to be let out for 11 months of the year. Many lenders prefer second properties to be let out on an Assured Shorthold Tenancy agreement, usually contracted for 6 months at a time and renewable. However, with holiday lets, the agreements tend to be weekly. So, again, the lenders available were restricted, but we managed to place with a small building society offering attractive rates and fees.

Other examples include applicants with no credit: too much credit: a desire to pay up front or add additional security in the form of another property increasing their ability to borrow more.

These are just some of the benefits of using an independent mortgage brokerage and especially if they are ‘whole of market’, and who can deal with any lender and are not restricted to a panel of lenders.

AToM now has seven lenders on its Complex Prime panel already looking exclusively at these scenarios, with other lenders shortly to join. These lenders may not be household names, but you’ll probably find they are extremely helpful and will look at most scenarios, manually, with no credit scoring and have an appetite to lend!

18 March 2011

Outside AToM HQ, in the Carfax, we have a distribution box for the WSCT ‘Property Today’ pages. These have been taken in huge numbers over the last few weeks, which give us the impression that people are looking for properties or are monitoring house prices. It’s also been a very busy few weeks in the mortgage market, with rates fluctuating and lenders appearing to be actively lending. Many financial institutions recorded a great month for new business in February, for both purchase and remortgage applications.

Any perceived mini-recovery could possibly stall though, as we approach the forthcoming budget from Chancellor George Osborne.

The pundits have been hard at work trying to predict what the outcome will be and it is a fact that, like it or not, the Government is still faced with a huge task in getting the country back on track financially.

Figures from creditaction for March report:

- £120,660,000 is the interest the Government has to pay each day on the UK’s net debt of £2,244.2bn (which includes financial interventions).- 212 mortgage possession claims will be issued and 163 mortgage possession orders will be made today- 337 people every day of the year will be declared insolvent or bankrupt. This is equivalent to 1 person every 59 seconds during a working day.- 1,603 Consumer County Court Judgements (CCJ's) were issued every day during Q4 2010 and the average judgement amount was £3,245.

Mortgage lenders took 7,900 properties into possession in Q4 2010 according to the Council of Mortgage Lenders. This equates to 87 properties being repossessed every day. In terms of payment difficulties, 169,600 mortgages ended Q4 2010 with arrears equivalent to at least 2.5% of the outstanding mortgage balance.

There are more credit cards in the UK than people according to the UK Payments Council.

The typical first-time buyer deposit in December was 23% (£35,020).

Yes, some of these figures make for grim reading, but they give an idea of the pressures the Government has to deal with in the upcoming budget and balancing the already fragile economy with the impact they will present.

11 March 2011

There are many mortgage lenders actively looking to increase their volume business by offering superb products and rates, but there’s also some who have good PR companies who portray a positive lending attitude.

You would think in the current climates, with mortgage volumes reasonably low, that new applications submitted to lenders would fly through and come to a quick and easy completion. Unfortunately, in some cases, it’s not so.

These are the daily trials and tribulations of dealing with some major mortgage lenders who simply do not appear to want to lend.

We’ve heard many stories recently from customers who have initially gone direct to a high street lender, but then wished they had not! Should your application meet all the requirements and the lender has no further questions or requirements, then a mortgage offer should be quickly produced.

However, if, for whatever reason, a lenders underwriter decides to request one further bit of information, or needs additional clarification, then the fun begins.

You may receive a call or an automated email detailing additional requirements and once you’ve provided the information, you enter a service standard queue (usually 48 hours) and assuming of course that the information returned does not get lost and is directed to the right department! Should the lenders underwriter decide they are happy with the additional information, your application may proceed. But, the new information provided could provoke further questions or requirements, and so the cycle begins again!

They say buying a house is the second most stressful event in your life after having children. I’d say that it’s nearly on level par in the current market conditions.

What this all demonstrates is the value of dealing with a specialist independent mortgage brokerage as we will take this painful flack on your behalf. In most cases, we will have a relationship with the lender, understand their requirements and ensure all the correct information is submitted from day one. There really is no better time to utilise the expertise and staffing levels we can provide for you. Let us take the strain on your behalf to push the mortgage through to an early completion. And, if a lender does decline to proceed, we can quickly try to find an alternative lender to suit your requirements, with the minimal of fuss.

04 March 2011

The Bank of England’s January lending figures report that the number of remortgages rose to 33,498. This is nearly 10% above the six month average. These statistics suggest an increasing wariness of future mortgage rates and in addition, the fact that fixed rate mortgage interest rates were relatively low in January.Mortgages for property purchases also increased, to 45,723, slightly below the six month average of 46,686. Total lending to individuals increased by £1.5bn.

I suspect these figures to be vastly different for February as some lenders increased fixed rates due to the fluctuation in the money markets and many customers will have raced to secure low rates before they were withdrawn.

Nationwide has reported that house prices increased by 0.3% in February with the average UK house price now standing at £161k. This is 0.1% lower than this time last year. The lack of first time buyers and easily accessible mortgages are still major factors with regards to prices and activity in the housing market.

AToM had a fantastic February for new business received. Applications were up 68% compared to February 2010 and resulted in our best month since June 2009 for new business. This was mainly due to our top four lenders – GE Money, who offer mortgages to the employed with some allowance for previous credit problems. Bank of China, who had a market leading lifetime tracker rate residential mortgage (they also cater for Buy to Lets). Platform (part of the Co-operative Bank Plc) who are actively lending in the Buy to Let market, with small arrangement fees. And AToM’s “Complex Prime”, a number of funders who look to assist those who have been declined by the high street lenders credit scoring systems for no apparent reason. This could include not being on the voters role, having to little (or too much) credit, securing a charge on more than one property, lending into retirement and many other reasons. Whatever your mortgage requirements, speak to an independent mortgage adviser!